Apple: It's not the cloud's fault

Nonstop buzz behind Apple’s new, larger iPhone, to be introduced next week, may have just hit a dark cloud of sorts with a high-profile celebrity photo breach over the weekend that has thrust iCloud into the news.

A scandal is the last thing any company needs before a major product announcement. But that’s just what landed in Apple’s lap when an alleged attack of the company’s iCloud service was blamed for the release on the Internet of nude pictures of celebrities like Jennifer Lawrence, D.C.’s favorite niece Kate Upton and Kirsten Dunst.

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“After more than 40 hours of investigation, we have discovered that certain celebrity accounts were compromised by a very targeted attack on user names, passwords and security questions, a practice that has become all too common on the Internet,” Apple said in a statement. “None of the cases we have investigated has resulted from any breach in any of Apple’s systems including iCloud or Find my iPhone.”

Apple is working with law enforcement to identify the criminals behind the attack. The FBI said in a statement that it “is aware of the allegations concerning computer intrusions and the unlawful release of material involving high profile individuals, and is addressing the matter.”

At first, no one knew whether it was a flaw in iCloud protocols or if it was a targeted hack aimed at specific celebrity email accounts. Doubts were raised early on about iCloud as the sole source of the leaked photos, with celebrities like actress-singer Victoria Justice tweeting that the nudes were fake. But just having iCloud discussed in the mix as the FBI investigates could be bad for business.

The scandal may not be on the scale and urgency of the Target intrusion, which affected financial records of millions of customers. But the whiff of anything Apple sends the tech world into a frenzy. And being caught up in a high-profile scandal still makes it difficult to hone Apple’s well-polished privacy and security image in Washington.

Though Apple tried to calm people down, some say the incident still raises questions about the cloud.

“We just really don’t know what happened here. One lesson that is starting to come out of this is people are saying they don’t know where their data is, if it’s in the cloud, uploaded somewhere else, or the corollary, who can access it,” said Chris Calabrese, legislative counsel for the A.C.L.U. “Companies need to do a better job of helping consumers to have control over their information. They need to do a better job of making the rules clear. If they don’t consumers will be less likely to adopt new systems and regulators will look more closely.”

The timing of the scandal comes as D.C. is debating what to do about tightening privacy and data security. So far, privacy legislation has gone nowhere, leaving the Federal Trade Commission to bring specific cases. Apple itself was caught up in an FTC privacy case over lax safeguards for in-app purchases by children.

“This one is a bit of a black eye. It hurts Apple as they try to get people comfortable with the cloud. It’s like the movie [‘Sex Tape’]: ‘It’s in the cloud, can we get it back?’ This says maybe you can’t. But Apple is Apple, and they will bounce back,” said Marlene Towns, a teaching professor of marketing at Georgetown University. “It’s a small speed bump.”

Apple has coped and overcome bad press before, even on the eve of big announcements. In 2010, Apple had to deal with antenna-gate, over a supposed flaw in its external antenna design. Apple also survived a scandal in 2012 and 2013 over labor practices at its supplier Foxconn, which had seen a rash of suicides at its biggest Chinese assembly plant. In May 2013, Apple was taken to task by lawmakers for supposed tax dodges. Monologist Mike Daisey, now disgraced, also tried to take on Apple, spreading accusations that the company exploited workers in 2012.

Despite all the critical press over the past five years, Apple’s stock hasn’t suffered one iota. In anticipation of the iPhone 6, to be announced Sept. 9, Apple’s stock reached an all-time high in August. At the opening bell Tuesday, Apple’s stock appeared unaffected.